Deutsche Bank Seeks Buyers for All or Part of Maher Terminals

Gillian Tan broke the news on June 26 that Deutsche Bank was looking for potential buyers for all or parts of Maher Terminals, which operates cargo container facilities at ports in the U.S. and Canada. Deutsche Bank’s asset-management arm spent around $2.3 billion, including debt, to acquire Maher in 2007. The terminals, located in Port of Prince Rupert in Canada and at Port Elizabeth in New Jersey, could fetch $800 to $1 billion for the sale, according to sources.

The story as it appeared on Dow Jones:
June 26, 2014, 3:55 PM EDT: Deustche Bank Seeks Buyers for All or Part of Maher Terminals — Sources

4:18 PM EDT: Deutsche Bank Seeks Buyers for All or Part of Maher Terminals

By Gillian Tan

Deutsche Bank AG has begun sounding out potential suitors for all or part of Maher Terminals, which operates cargo container facilities at ports in the U.S. and Canada, according to people familiar with the matter.

The German bank is considering selling the entire business or Maher’s two terminals individually, but it could opt not to sell now, according to one of the people. If sold in its entirety, the company could fetch between $800 million and $1 billion, one of the people said.

Deutsche Bank’s asset-management arm spent around $2.3 billion, including debt, to acquire Maher in 2007. The bank has, over time, written down the $1.1 billion in equity that backed the initial deal, according to people familiar with the matter.

In a recent regulatory filing, Deutsche Bank said it had recognized an additional EUR314 million ($427 million) loss after a restructuring of Maher’s debt, bringing its total loss on the investment to more than $1.5 billion.

Maher’s terminals at Port of Prince Rupert in Canada and at Port Elizabeth in New Jersey connect cargo that arrives by boat with rail lines and roads. It also has proposed the construction of another container terminal on Canada’s east coast. Lost contracts and lower-than-expected port volumes caused Maher’s earnings to sink during the financial crisis, and the company carries a high debt load in part due to the 2007 deal.

Port of Prince Rupert is considered the better-performing part of Maher, some of the people said. It is the closest North American port to Asia, according to its website.

Port assets have fetched high prices in recent sales. Earlier this year, Hastings Funds Management and China Merchants Group paid $1.6 billion for Australia’s Newcastle Port, the world’s biggest coal-export terminal, representing a multiple of 27 times the port’s earnings before interest, taxes, depreciation and amortization. Canadian pension fund Caisse de Depot et Placement du Quebec paid a similar multiple for Global Infrastructure Partners’ 26.7% stake in the Port of Brisbane late last year.

Morgan Stanley Infrastructure Partners’ Montreal Gateway Terminals Partnership, a cargo container facility at the Port of Montreal, is also on the block, people familiar with the matter said last month.

Deutsche Bank has been selling off investments in the internal unit it created two years ago to hold unwanted assets. Maher is one of the unit’s largest remaining assets.

Blackstone Group LP last month agreed to pay Deutsche Bank $1.7 billion for Cosmopolitan of Las Vegas, a 3,000-room hotel and casino. The bank sunk around $4 billion in the Cosmopolitan, first as a lender and then as an owner after its original developer defaulted.

In March, RHJ International bought Germany’s BHF-BANK from Deutsche Bank for about EUR340 million.

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